I sat there, feeling my face glowing redder by the second. There had been around 20 second of silence at this point.
He asked again, “so what does adding value mean?”
Around half of the hundred or so people sat in front of me had turned around to watch me boil over with embarrassment.
100% of the people behind me were staring at the back of my head, spurring me on to say something, anything.
My mouth started to move, the hesitation was stifling.
“To make stuff better?…”
The tone of my voice made it sound more like a question than an answer.
The presenter on stage at the sales conference didn’t know how to respond to that. He just carried on with his presentation as if I didn’t exist.
As I sunk back into my chair, I made the promise to myself that I’d suss out what this ‘adding value’ crap that all sales gurus talked about actually meant, how I could implement it and how it could make me more money.
The Difference Between Price And Value
As I discussed in my recent chat with Bob Burg on the Salesman Podcast the first step to understanding what your sales manager is trying to say when they scream “Not hit target?! You need to add more value!” at you, is to understand the difference between price and value –
- Price – The amount a prospect is willing to pay for a product/service. This is generally defined by the market rather than the company unless they are so far differentiated from everyone else that they’re in a league of their own (which is VERY rare).
- Value – Is the perceived benefit of using the product/service. The perceived value of medical insurance is much higher when you’ve just found out that you have cancer compared to when you think you’re healthy for example.
This is something I got wrong for a long time in sales. You’d don’t set the price. Discount don’t matter. That’s all controlled by the market.
That stuff is beyond your pay grade (for the moment) so don’t concern yourself with it.
HINT: If you’re working for the ‘lowest priced’ in your industry, you’re in trouble. Your unique selling proposition could be taken from you at any moment.
For years I battled with purchasing managers on price when I knew our offering was fair. The part of the puzzle which I hadn’t understood was the perceived value I was giving.
Value isn’t talked about in $$$ it’s discussed by a different metric – the buyer’s desire.
Asking Questions, Fulfilling Needs
I learned more in 40 minutes chatting with Linda Richardson on the Salesman Podcast about the value that is created when I actually listen to prospects and then make my products fit around their personal needs than I ever have from any sales book or training.
If a buyer has X problem and you have Y solution then great. They should probably buy and use your product, right?
It’s not as simple as that though I’m afraid.
It takes mental effort and precious time for a buyer to confirm that you’re not bullshitting them and your product solves their problem.
It might take time and money for them to make that initial switch which could be better invested elsewhere.
They might just not care about their job enough to bother trying to make improvements.
Therefore if your product JUST solves their problem then they might not have any desire to take you up on it (and put any commission in your back pocket).
Now compare this to when a new iPhone comes out. Idiots will camp outside Apple stores to replace a phone with another phone with a slightly bigger screen and bigger camera.
What motivates them to do this?
It’s the added value of being treated like a hero by the Apple staff when they open their doors. It’s the added value of having the press snap photos of them as they walk in. It’s the added value of being the first out of all their friends to have the phone which makes them feel special.
Obviously I think this is stupid.
I understand that the value has been created by some very clever marketing by Apple which has birthed a generation of evangelists for their brand.
But I’m not immune to intangible value.
When I get in my Mazda RX8, I give it 10 minutes before revving to over 4,000 RPM, then perhaps another 5-6 minutes until I get to a quiet bit of road. Then I will floor it in second gear and feel a grin growing and devil horns sprouting as it roars all the way to 10,000 RPM.
It sounds like a superbike making love to a lawnmower and I love it.
Note: This isn’t me. Looks like he is speeding a little…
Mazda created this scenario by design by giving the car low torque at the bottom end of the revs to force you to play in the high end and by using an exhaust system that is quiet until you get over 7,000 RPM to encourage you to stay there to listen to the noise.
A big part of me being sold by the salesman when I bought the car was down to him taking the time to point all this out on the test drive and then sit outside the dealership revving the engine so I could hear it and enjoy it.
This turned the buying decision into an emotional one rather than a rational one and a bought the car right there.
The intangible feeling/grin this gives me way overpowered the very tangible, shockingly bad miles per gallon the car gets (and all the other running costs) and closed the deal.
A poor salesman would have spent time trying to justify the poor MPG.
An average salesman would have explained that you can’t rev that high without burning a crap tonne of petrol.
The top sales professionals wouldn’t even mention the MPG as they’re focusing on adding value, not debating features and benefits.
Give the Value Up Front
The hardest part of for me to “just give more value” wasn’t understanding the concept. That became simple once I was shown it was all about people’s feelings and desires.
It was that it has to be given up front.
You have to invest in people before they can financially invest in you or your product.
I always thought I was more badass than I actually was. I thought I was a hardworking young sales professional who had to be strong willed not to let anyone waste my time.
I was a busy guy after all.
If someone wasn’t serious about doing business with me and I hadn’t closed them within 1-2 face to face meetings I wrote them off as a time waster and went onto the next prospect.
It wasn’t until I spent a day out with an older rep called Andy that this changed.
He forced some humble pie down my neck. In fact I was shitting humble pie for weeks afterwards.
Andy knew that I had a bit of a chip on my shoulder and being 24 with a decent salary, driving a brand new BMW and spending all my time selling medical equipment to flashy surgeons had put it there.
I met him at a local hospital at 8am and he pulled out two pieces of paper.
The first was a list of all the deals he’d closed that year. The other was my closed deals.
“What’s the difference between these two lists?” he asked smugly.
I searched down, then side to side to compare.
His average order size was £50k up on mine! He confirmed this observation and then dragged me into his first meeting of the day.
Having spent pretty much the last 12 months of my life feeling important because 90% of my time was spent hanging out with surgeons I was surprised when we were knocking on an office door, with dimly lit lighting outside, right in the guts of the hospitals basement.
15 minutes of talking about motorbikes later and there was no paperwork being handed over. No contract talk or even a mention of price.
We hadn’t even met with anyone to do with surgery. We’d met with a random NHS middle manager.
I confronted Andy, ready to do a pitch about how his time management sucks and how he if prioritized more he’d be closing even bigger deals.
Then he explained.
Mr Jones managed a small side ward on the urology department. He hated the rest of the management he ‘worked with’ because his office was the other side of the hospital and he never got to spend time or get to know any of them.
It’d been this way for years.
Andy recognised this and so he had called over to invite Mr Jones to a urology meal he’d arranged for the surgeons and managers. At the meal he went on to re-introduce him to everyone else and went out of his way to make him feel special.
The department started off looking for a single endoscopic camera system to improve the quality of their procedures.
They ended up converting the whole of the department over to a single supplier after Andy’s value adding networking.
This netted Andy a £30k+ commission bonus a few months later.
Not bad for making a little extra effort.
Make Them Obligated To Do Business With You
Another angle for all of this is to leverage added value so you can practically force someone to do business with you.
I do this with the Sales School regularly.
Getting a new sign up usually goes something like this –
- A salesperson sees a Salesman.Red blog post on facebook as a friend has liked it. They click the link and visit our website.
- They like what they see so they subscribe to our newsletter.
- I send them a tonne of awesome, free content (that has taken me thousands of hours to produce). Including podcasts, videos, Q/As, #AskWillShow episodes and more.
- They then fall into the rabbit hole and learn a bunch about sales whilst (hopefully) being entertained.
- They then email me a question. I reply within 12 hours. We go back and forth.
- I help them make a contact within a business they’ve been struggling to book a meeting with. They say thank you and ask if there’s anything they can do to help me.
- I tell them to join the Sales School so I can keep adding value to their lives.
- They join as they’d be embarrassed not to.
- I make a little money.
I gave so much upfront that they would have felt guilty not to try and give back a little.
It’s a powerful sales technique that your competition will never use because they’re too lazy.
If it’s So Simple, Why Does Nobody do it?!
There are 3 reasons why salespeople don’t “give more value”.
As a member of sales nation I challenge you to take a look at what you’re doing day to day and reply in the comments below if you’re not adding value because of one of the following reasons –
- Before reading this excellent article you weren’t sure of the difference between value and price (this is where I started off too).
- It takes effort and a slight bit of risk. You have to invest sweat equity into a deal before it happens. You’ve been too lazy to do this so far.
- You simply don’t have the time to be running around and going the extra mile for people.
Which one are you guilty of? How are you going to nail it moving forward?